One of the more constant problems within the payment card industry is the management of fraud in the use of payment cards. In fact, a significant portion of card fraud is counterfeit fraud, which involves counterfeit payment cards being used fraudulently at ATMs and/or points of sale (POS), often in a foreign country relative to the card holder's home country. To address this problem, card payment providers sometimes deny transactions from countries where such fraud is common unless the cardholder alerts the payment card issuer of his travels to that country. This can be inconvenient to the cardholder. For instance, when a cardholder travels to Russia where counterfeit fraud is currently a problem, it may be that his or her transactions are denied unless he or she informs or had informed the card issuer of his or her travels.
Another mechanism being proposed is to use mobile phone locator services such as Ericsson's IPX (Internetwork Packet Exchange) Country Look-Up Service provided by cellular telephone service providers to provide a confirmation that a person is in the country where the transaction is carried out. However, this requires involving the cellular telephone provider, and likely incurring the costs for the service thereof, is limited to mobile phone services that offer such a service and is limited to mobile phones. Further, it may not be particularly useful if the mobile phone locator service only identifies a large geographic region, such as a country. This approach would also involve the complexity of coordinating entities which are not normally in communication, such as the cardholder, the cellular telephone service provider, and the payment card industry, particularly the card issuer.
In areas not directly related to the method and system disclosed herein, consumers currently have access to a range of personal devices (such as cellphones, GPS devices, personal computers, etc.), which are able to identify (to varying levels of accuracy) the geographic location (based on either of or a mix of GPS systems, mobile phone cell-phone towers, Wi-Fi hot-spot, IP address, etc.). In this respect, a number of software applications are available in the market which offer consumers with customized services based on the location information enabled on their mobile device. For example: (1) MasterCard has an iPhone application to locate the nearest ATM based on the geo-location information provided by the phone; (2) MasterCard already provides location based card controls based on the location of the payment transaction on the card (e.g. country or event, merchant or POS); (3) some providers have applications on mobile devices that enable users to search for products and services based on the location information (e.g. to find a restaurant); and (4) other services enable an application enable a network of “friends” or “family” to share location based information and, for example, to find friends in the vicinity of the mobile device or to be alerted when a friend arrive nearby (e.g. in the same city, for example).
There does not appear to be any existing services in the market which enable cardholders to apply controls on a payment card based on location based information obtained from a mobile device with geo-location capabilities. Further, there does not appear to be existing bank or issuing services in the market leveraging location based card controls for the purpose of preventing and managing fraud on payment cards.